The most common bankruptcy is known as Chapter 7 bankruptcy, this type of bankruptcy is known as "liquidation bankruptcy". It can be one of the easiest and quickest ways for most people to file for bankruptcy. Chapter 7 bankruptcy is available for.
Chapter 7 bankruptcy requires the filer to disclose all of their assets to the court. Someone who does not have assets will be determined as a no asset case and eventually their debt will be discharged. If you do have assets those assets will be given to the trustee to control. The trustee will help with the sale of your non-exempt assets and the money will be distributed to the creditors in order to satisfy the filer’s debts. The assets will be distributed to creditors based on priority determined by the bankruptcy code. Secured debt is considered a priority over unsecured debt.
Chapter 7 bankruptcy can eliminate most unsecured debt.
Chapter 13 bankruptcy is occasionally called the "wage earner’s bankruptcy plan". It is an alternative to filing Chapter 7 bankruptcy, the liquidation plan. If you do not qualify to file Chapter 7 bankruptcy, Chapter 13 bankruptcy might be a good option for you. In order to qualify for chapter 13 bankruptcy you must be an individual, husband or wife, or a sole proprietor. You must have a regular income, and you must have unsecured debt of less than $307,675 and secured debt of less then $922,975. (These amounts are periodically adjusted based on the consumer price index).
Just as in a Chapter 7 Bankruptcy, a Chapter 13 Bankruptcy requires that the debtor, normally with the help of a bankruptcy attorney, files a Bankruptcy Petition. However, in addition, the debtor is required to file a schedule of liabilities and assets, a list of current income and expenses and a forms stating other financial data. In addition, the bankruptcy court must be notified of any contracts or unexpired leases that the debtor has. Most debtors hire a bankruptcy attorney to make sure all information is complete and then consolidated in an appropriate format to be filed with the bankruptcy court.